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In 2009it was 50. In 2013, it had been 25, in the time of writing it is 12.5, and sometime in the middle of 2020 it will halve to 6.25. .

At this speed of halving, the total number of bitcoin in circulation will approach a limit of 21 million, making the currency more scarce and valuable over time but also more expensive for miners to produce.

Here's the catch. In order to get bitcoin miners to really earn bitcoin from verifying transactions, two things must happen. First, they need to verify 1 megabyte (MB) value of transactions, which can theoretically be as small as 1 transaction but are far more often a few thousand, depending on how much data each transaction stores.

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Second, in order to put in a block of transactions to the blockchain, miners must solve a intricate computational math problem, also referred to as a"proof of work." What they're doing is trying to come up with a 64-digit hexadecimal number, known as a"hash," that's less than or equivalent to the hash.

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In other words, it is a bet. .

The difficulty level of the most recent block at the time of writing is about 7,184,404,942,701. That is, the chance of a computer producing a hash beneath the target is 1 in 7,184,404,942,701 less than 1 in seven trillion. That level is adjusted every 2016 cubes, or about every 2 weeks, with the aim of keeping rates of mining constant.

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The reverse is also true. If computational power is taken from the network, the difficulty adjusts downward to make mining easier. .

"Say I tell three friends that I'm thinking of a number between 1 and 100, and that I write that number on a sheet of paper and seal it in an envelope. My friends don't need to guess the exact number, they simply must be the very first person to figure any number that's less than or equal to this number I am thinking of.

"Let us say I'm thinking of the number 19. If Friend A guesses 21they lose because 21>19. If Friend B guesses 16 and Friend C supposes 12, then they have both technically came at viable answers, because 16<19 and 12<19. There is no'extra credit' for Friend B, even though B's answer was nearer to the goal answer of 19. .

"Now imagine I pose the'guess what number I'm thinking of' question, but I'm not asking just 3 friends, and I am not thinking of a number between 1 and 100. Rather, I am asking millions of prospective miners and I'm thinking about a 64-digit hexadecimal number. Now you see that it's going to be quite difficult to guess the ideal answer." .

If 1 in seven trillion doesn't sound difficult enough as is, here is the catch to the catch. Not only do bitcoin miners need to think of the ideal hash, but they also must be the very first to do it.

Because bitcoin mining is essentially guesswork, arriving at the right answer before another miner has almost everything to do with how fast your computer can create hashes. Only a decade ago, bitcoin miners could be performed competitively on normal desktop computers. As time passes, however, miners recognized that graphics cards commonly utilized for video games were more effective at mining than desktops and graphics processing units (GPU) came to dominate the match.

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These can run from \$500 into the tens of thousands. .

Today, bitcoin mining is so aggressive it can only be done profitably with the latest up-to-date ASICs. When using desktop computers, GPUs, or older models of ASICs, the expense of click over here energy consumption actually surpasses the revenue generated. Even with the newest unit at your disposal, one pc is rarely enough to compete with what what miners call"mining pools." .

A mining pool is a group of miners who combine their computing power and divide the mined bitcoin between participants. A disproportionately large number of cubes are mined by pools rather than see post by individual miners. In July 2017, mining pools and companies represented approximately 80% to 90% of bitcoin computing power. .

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Between 1 in 7 trillion odds, scaling difficulty levels, and the massive network of users verifying transactions, one block of transactions is confirmed roughly every 10 minutes. But its important to keep in mind that 10 minutes is a target, not a guideline.

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The bitcoin network can process about seven transactions per second, with transactions being logged in the blockchain every 10 minutes. Since the network of bitcoin users continues to grow, however, the number of transactions made in 10 minutes will eventually exceed the number of transactions which can be processed in 10 minutes.